Broadcom Ltd

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AVGO : NASDAQ : Technology
$220.81 -2.28 | -1.02%
Today's Range: 219.77 - 223.135
Avg. Daily Volume: 2478600.0
04/28/17 - 4:00 PM ET

Financial Analysis


BROADCOM LTD's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. BROADCOM LTD is extremely liquid. Currently, the Quick Ratio is 2.58 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 271.66% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)4139.01771.0
EBITDA ($mil)1710.0775.0
EBIT ($mil)596.0531.0
Net Income ($mil)239.0377.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)3536.02169.0
Total Assets ($mil)49617.010777.0
Total Debt ($mil)13562.03938.0
Equity ($mil)19033.05121.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin64.7763.92
EBITDA Margin41.3143.76
Operating Margin14.429.98
Sales Turnover0.310.65
Return on Assets-3.7812.89
Return on Equity-9.2727.92
Debt Q1 FY17 Q1 FY16
Current Ratio3.464.61
Debt/Capital0.420.43
Interest Expense111.041.0
Interest Coverage5.3712.95


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)400.29278.11
Div / share1.020.44
EPS0.581.3
Book value / share47.5518.41
Institutional Own % n/a n/a
Avg Daily Volume2739533.02805292.0

Valuation


BUY. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. For additional comparison, its price-to-book ratio of 4.59 indicates a significant premium versus the S&P 500 average of 2.99 and a discount versus the industry average of 4.74. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. The valuation analysis reveals that, BROADCOM LTD seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AVGO NM Peers 34.98   AVGO 21.31 Peers 17.85

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

AVGO's P/E is negative making this valuation measure meaningless.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AVGO is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AVGO 13.74 Peers 19.92   AVGO NA Peers 1.39

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AVGO is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AVGO 4.59 Peers 4.74   AVGO -190.56 Peers 0.42

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AVGO is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AVGO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AVGO 5.60 Peers 4.62   AVGO 124.25 Peers 23.82

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AVGO is trading at a premium to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

AVGO has a sales growth rate that significantly exceeds its peers.

 

 

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